Introduction to the Market Situation
Wall Street experienced a decline in Treasuries after receiving a mixed economic report.
Traders are watching for signals from the Federal Reserve (Fed) regarding interest rate decisions for the current year.
Economic Indicators and Fed’s Stance
Personal spending exceeded estimates, but the Fed’s preferred measure of underlying inflation slowed to a three-year low.
This data suggests the Fed might delay a rate cut until clear signs of economic cooling are observed.
Investors are currently pricing in a potential rate cut in May, despite some not ruling out a cut in the first quarter.
Market Trends and Influences
Upcoming economic reports, particularly those reflecting disruptions in shipping, are expected to impact market sentiment.
US two-year yields rose, and the S&P 500 marked its seventh consecutive session of gains, nearing 4,900.
However, the Nasdaq 100 underperformed due to disappointing forecasts from certain companies.
Analysts’ Projections
Analysts anticipate rate cuts in 2024, possibly starting in May, with expectations of four cuts of 25 basis points each.
Improvements in inflation give the Fed room to cut rates, but caution is advised, and the speed of policy normalization is a key question.
Economic Data and Corporate News
PCE and Personal Spending data are seen as positive for the Fed’s 2% target and the stock market.
In the corporate sector, American Express reaffirmed long-term goals, Visa exceeded predictions, while Salesforce announced layoffs.
Market Performance and Oil Prices
The S&P 500 and Dow Jones saw slight gains, while the Nasdaq 100 declined.
Stoxx Europe 600 and MSCI World index also showed positive movements.
Bitcoin rose above $41,000, and oil was on track for its biggest weekly gain since October.
Company-Specific UpdateS
Spirit Airlines faced a decline after JetBlue mentioned possible termination of its planned acquisition.
American Express and Visa posted positive financial results, while Salesforce announced layoffs.
T-Mobile reported earnings missing estimates despite an increase in mobile subscribers.
Global Events
Saudi Aramco continued tanker shipments through the Red Sea despite Houthi threats.
Market Indices and Currency Movements
S&P 500, Dow Jones, Stoxx Europe 600, and MSCI World index showed varied gains.
The Bloomberg Dollar Spot Index decreased slightly.
Currencies such as Euro and Pound saw marginal increases, while Yen declined.
Bitcoin and Ether experienced positive movements.
Bonds, Commodities, and Precious Metals
Yields on 10-year Treasuries and Germany’s 10-year yield experienced slight increases.
WTI crude oil prices showed a minor decrease, while spot gold prices saw a small decline.